• 312 days Will The ECB Continue To Hike Rates?
  • 312 days Forbes: Aramco Remains Largest Company In The Middle East
  • 314 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 714 days Could Crypto Overtake Traditional Investment?
  • 719 days Americans Still Quitting Jobs At Record Pace
  • 721 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 724 days Is The Dollar Too Strong?
  • 724 days Big Tech Disappoints Investors on Earnings Calls
  • 725 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 727 days China Is Quietly Trying To Distance Itself From Russia
  • 727 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 731 days Crypto Investors Won Big In 2021
  • 731 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 732 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 734 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 735 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 738 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 739 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 739 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 741 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Gold's Next Move

When determining if a bull move in gold is a probability, a good indicator can be found in the relationship between the junior and senior gold miners etf's. If a bull move is occurring, the junior gold miners etf (GDXJ) should show indications that it will outperform the senior gold miners etf (GDX). This implies investors are willing to take on more risk in anticipation of greater gains by taking positions in the GDXJ verses the GDX.

Recently, a pattern became noticeable in the GDXJ/GDX ratio if you take into account its momentum indicators that relates back to a prior short-term bull move during the summer of 2013. The ratio chart below highlights the similarities. The green circles show the similarities in the patterns, starting with the initial negative divergence that occurred in the short-term momentum (1st pane-red line), while the long term momentum (2nd pane-green line) was oversold. The following dip on short-term momentums (pane 1,4,5) into their oversold levels turned out to be the final low before resumption of the next wave up. The actual GDXJ chart is shown in the bottom pane. Note that the GDXJ/GDX ratio chart (3rd pane) rallied up to the pink and purple moving averages (in 2013) about 1 month later, so that is our expectation for the current situation with a possible 20% return as a target (GDXJ: $29~31) as highlighted by the horizontal double red lines in the GDXJ chart in the bottom pane. We would watch the price action on Monday, April 20 for a break above this week's high for confirmation of this scenario. Alternatively, any move lower next week would be considered to negate any further bullish potential in the near term.

GDXJ:GDX Market Vectors Junior Gold Miner's Market Vectors Gold Miners NYSE
Larger Image

 

Back to homepage

Leave a comment

Leave a comment